To think an annual property tax is incredibly unfair?

[Itchthescratch]

I come from an area with low house prices. It is great! My friends can generally afford houses even with lower salaries as the earnings:house prices ratio is better. Rents are also lower so they have proportionately more disposable income.

I have moved to a more expensive area where house prices are higher and people have really had to push themselves to buy a property. Salaries are higher but not high enough to make up the difference. They have had to pay more stamp duty , pay more interest and have less disposable income each month.

I am really struggling to understand why my friends in the South should also automatically be paying more property tax under the new proposals being suggested by Burnham supporters? What is the justification? They would love to buy a large detached house for £300k like my friends from home but this isn't possible. It feels like they are being double penalised.

Just to add house prices haven't risen in real terms in the area in live in now for 20 years so the value of my friend's houses is simply money they have paid in.

I’ve already been corrected. There won’t.
We do need to scrap Stamp Duty, and LVT sounds good to me.

Where are the details of this “existing housing” £1200 cap you mention?

It potentially penalises people living in an expensive area at the introduction of the tax, but in the long term it makes moving between areas more affordable. And can free up more larger homes, as older people are more likely to downsize without large stamp duty bills to pay (and to reduce how much they need to pay for this tax).

The main issue is the way to introduce it. Someone with a large mortgage who has just paid the stamp duty would feel really hard done by. So maybe there could be a slower start for any extra payment if you have only moved in the last 5 or so years.

Try not to just think about the negative impact to your demographic, and consider the positive effects through others. Like making it easier and more affordable to move house. Property taxes are common in places like the USA so it isn't an unusual concept, just a change to our norm.

This isn't whether I got it from, but I've just googled and he's a link

https://www.standard.co.uk/homesandproperty/property-news/andy-burnham-new-land-value-tax-how-would-it-work-b1286663.html

Essentially he's backing proposals by the fairer share campaign.

In reality, people in wealthier areas tend to pay less in CT than those in poorer areas, partly because councils in wealthier areas have more capacity to raise money in other ways eg business rates and partly because poorer areas tend to have a higher proportion of houses in bands A-C and therefore have to have a higher baseline charge in order to raise sufficient revenue to fund services. (This is why the slashing of local government funding from 2010 has been catastrophic for the north in particular.)

Using Band D CT, the 5 cheapest areas are all in London, with most authorities in the NE charging around 150% more than the lowest (Wandsworth). Given the usage of services will be the same, are you as incensed at this unfairness?

I would be affected possibly and although I have an asset I am cash poor. However I think I should pay more and if I can’t I should move. I do think they should sort stamp duty at the same time.

That would be me lol. Band fucking F and the house isn't even worth £350K.

The devil is in the detail with the cap of £1200 pa stated to be an “initial cap”. How long will that remain? One year, two?

People already paid tax on their money through invite tax, national insurance, capital gains tax, to randomly tax again is wrong.

What’s your point? By your logic all houses with the same amount of people should be paying the same? Which is a completely different argument - which can be argued for or against. My point is that for the current system I am unfairly paying more because the rest of the houses were valued in 1991 and mine was valued more recently so even though it is smaller and worth less than theirs I am paying more.

Why do you think it’s unfair?

if You have already paid SD recently then this should be offset but I really hope it stays as it is. Also SD holds prices back I think so you would pay for a house anyway without it

Until you move.

With amount of u turns wouldnt even last a week and in true form that will creep up anytime there is big back hole in budget ..before you know it it'll be 1%, 2% 3%....wait until you retire and try funding that!

Maybe, that would be “levelling out” wouldn’t it? If the cheaper parts get more expensive due to more demand and the expensive parts get cheaper due to less? So there wouldn’t be such a massive disparity between Walthamstow and Walsall?

Yes I think you should move. You have a large asset. We tax earnings a lot in this country but we don’t tax wealth enough. Having assets is a type of wealth. You don’t get to avoid taxes on earnings because paying these taxes would be tricky for you, so why should you be allowed to avoid a tax on assets?

Yes, but what would that actually achieve though in real terms?

My friends in the north won't be happy as housing would become less affordable for those that haven't bought yet and those with children that want to buy in the future. Their house may be worth more but they will have to sell to release the money so won't 'feel' richer until they do this but they will get whacked with a higher property tax until they do this.

Those in the South who have recently bought will find themselves in negative equity. Again, this creates huge issues.

I'm not sure these downsides are worth the potential upsides of levelling everything up. I think neither my friends or the south will be happy.

Will the mortgage company get taxed on the portion of the house they have a claim over?

I imagine it's a very nice or big house though in your area. Do you think you should be contributing more than other people in your area? Why should I in a probably less nice house than yours in the south be subsidising you?

You can abolish stamp duty without requiring a small section of society to make up the shortfall. 25% of the country will pay more, but more than half of Londoners. If it's for the greater good to remove Stamp Duty (which is agree with) then everyone should be helping to replace the money lost. Not just a few because they're unlucky enough to live in expensive areas.

I think the same percentage each year is much fairer than the current system where we pay double the rate in London for a house worth 1/4 of the amount. Council tax in London is cheaper (economies of scale plus less cheap a rated properties) at 0.48 ours would be £1000 a year cheaper, band e.

Is the property tax on top of council tax? What about people in social housing?

It doesn't magically mean I have as much money as someone with the means to pay for a house worth five times mine, but who pays the same council tax as me rather than more.

It's a three bedroomed house, not a mansion.

Someone with the more expensive house has a far bigger mortgage than you. Why do you think they have more money than you spare?

Your area must have a lot of expensive local services if you're paying double the rate of an equivalent house in London. Who benefits from these local services? You and your fellow citizens. Not people in London so why should they pay for the services?